free supplies GST

[Madhavan iyengar]

A Company X based in delhi is a distributor of product a manufacturer Y

Y supplies Free of Cost product to X X in turn Distributes it free of Cost to its customer

Whether any GST implication on X on FOC supply made to its Customer( since no ITC is claimed on the FOC material by X so no ITC reversal is required when same material is supplied as FOC to Customer )

X need not discharge any GST also since there is no supply being FOC

AI Summary

No GST on Free Product Distribution by X Without Consideration; Applies If X and Y Are Unrelated Entities. A company, X, based in Delhi, distributes products from manufacturer Y for free to its customers. The query discusses whether there are any GST implications for X on these free-of-cost (FOC) supplies, especially since no input tax credit (ITC) is claimed or reversed by X. One response highlights that under the CGST Act, certain activities are treated as supply even without consideration, but this applies only if X and Y are related entities. Other responses agree that since there is no consideration involved, X is not liable to pay GST on the FOC distribution.